 "Shriram Finance plans to raise billion for business growth, anticipating a 15-16% loan increase this financial year.")
Y S Chakravarti, the MD and CEO of Shriram Finance, announced that the company plans to raise $1 billion (around Rs 8,300 crore) in the next six months to support its growth. This includes an initial $300 million targeted for October, with the remainder to follow as Market conditions allow. While Shriram Finance intends to fund its operations through various sources, including loans from development financial institutions, it has not experienced significant funding pressure due to its strong credit rating. Moreover, loan growth is projected to reach 15 to 16 percent this financial year, driven by a rise in asset disbursement and an expansion in its gold loan division, which plans to add 500 new branches within two years.
Shriram Finance Plans $1 Billion Fundraising Boost for Growth
Shriram Finance, a prominent Non-Banking Financial Company (NBFC), has announced plans to raise $1 billion, approximately Rs 8,300 crore, through overseas funding in the next six months. According to Y S Chakravarti, the Managing Director and CEO of Shriram Finance, the company aims to secure $300 million in the upcoming weeks, potentially by October, with an additional $500-700 million anticipated during the remainder of the current financial year.
The fundraising strategy will include partnerships with development financial institutions like the Asian Development Bank, Kfw, and the United States Development Finance Corporation (DFC). The timing of this capital raise will depend on favorable Market conditions.
Chakravarti also projected that loan growth for the company is expected to increase between 15 to 16 percent during this financial year, with the company’s Assets Under Management (AUM) reaching Rs 2.33 trillion by the end of June 2024. In the first quarter of FY25, Shriram Finance disbursed Rs 37,710 crore compared to Rs 30,455 crore in the same period last year.
Despite recent regulations from the Reserve Bank of India, which require lending entities to set aside more capital for loans to NBFCs, Shriram Finance has not experienced funding pressures. Chakravarti attributes this stability to the company’s strong credit rating and diverse funding sources. He noted that smaller players, particularly those rated below AA, are encountering more significant challenges.
On another front, Shriram Finance is expanding its gold loan business, planning to increase their branches offering these loans from 1,500 to 2,000 over the next two years.
This growth underscores Shriram Finance’s commitment to enhancing its financial services and meeting the demands of its customer base.
Image: Y S Chakravarti, MD & CEO, Shriram Finance (Source: Business Standard)
Published: September 8, 2024 | 4:04 PM IST
Tags: Shriram Finance, fundraising, loan growth, Y S Chakravarti, NBFC, financial services, gold loans
What is Shriram Finance planning to do?
Shriram Finance plans to raise $1 billion from overseas in the next six months.
Why does Shriram Finance want to raise $1 billion?
They aim to use the funds for expanding their business and supporting growth.
Where will the money come from?
The funds will come from international investors and markets.
How will this affect customers?
The raised funds may help improve services and provide more financing options for customers.
When can we expect this fundraising to happen?
Shriram Finance plans to complete this fundraising within the next six months.
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